Ebay Wins Key Patent Judgement

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eBay scored a huge victory against MercExchange that could have serious ramifications on RIM’s patent lawsuit with Visto. A few years back MercExchange sued eBay on the basis that their “Buy It Now” service infringed on MercExchange’s patent, and they were awarded $35 million. However, MercExchange pushed further, asking the court to stop eBay from using the system. On Monday, the U.S. Supreme Court ruled unanimously that judges have discretion on whether to impose such injunctions.

“The Supreme Court’s unanimous decision kills any argument that a patent owner is automatically entitled to an injunction if it can establish infringement of a valid, enforceable patent,” said partner James M. Smith, who specializes in intellectual-property law at Squire, Sanders, & Dempsey. “This is a shot across the bow of patent owners who use the threat of an injunction to extort large licensing fees.”

How does this affect RIM? The threat of having its BlackBerry service shut down through injunction was one of the major factors behind RIM’s decision to make a huge $612 million patent settlement with NTP. With the eBay ruling now on their side, tech companies like RIM now have much better odds if they want to roll the dice in court against patent trolls instead of paying for extortion-like settlements.